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5 Tips for Purchasing Travel Insurance

Written by: MainStreet07/16/13 - 1:44 PM EDT

By Juliette Fairley

NEW YORK ( MainStreet) -- Although 53% of travelers cited trip cancellation protection as the main reason they purchase travel insurance, the airline perk isn't perfect and doesn't reimburse for a simple change of plans, according to a new study.

"Travel insurance can be extraordinarily helpful in certain situations, such as expensive trips to international destinations with limited access to medical care," said Brian Kelly, founder of ThePointsGuy.com, a travel news and advice website. "However, people need to know that travel insurance doesn't protect against all types of trip cancellations."

Passionate about travel and adventure since his childhood, Kelly has seen his worldwide jet-setting earn him elite status with US Airways by his sophomore year in college. He later became a recruiter for a major investment bank where his extensive travel schedule enabled him to master the ins and outs of frequent flyer miles and credit card rewards programs.The survey found that only 37% of Americans say travel insurance is worth the cost and only 21% purchase travel insurance. To boot, only 7% always purchase travel insurance compared to 14% who sometimes do.

"A refundable plane ticket is a better bet if you might change your mind," Kelly advises. "Travel insurance is intended more for unforeseen circumstances such as medical emergencies and natural disasters."

About 27% of consumers opt for the insurance for the purpose of having medical coverage.

Kelly advises travelers to contact their credit card companies about protections available when they use their cards for travel purchases.

"Many credit cards automatically offer various forms of protection such as travel emergency assistance, rental car insurance and more," he said. "It's important to understand what is covered and what is not when deciding whether travel insurance is the right option for you."

1. Travel insurance doesn't reimburse fickleness. If you think you might cancel your trip, use the American Airlines 24-hour hold and United Airways 7-day FareLock before booking.

2. When purchasing travel insurance for the medical coverage, call the insurer to determine what expenses and exclusions are covered, if any. For example, evacuation or transportation in the event of an emergency.

3. Depending on the credit card you used to book travel, you may have travel protection built into the card. For example, American Express allows its users to create and customize their own travel insurance coverage.

4. Before purchasing, research insurance service providers because not all insurers readily cover lost or stolen luggage, flight cancellation, terrorism or natural calamities. Read the policy's terms and conditions pertaining to the loss of personal possessions, money and documentation, such as passport and driver's license.

5. Compare the medical facilities you get from various policies to determine which one provides the best coverage when traveling abroad.